car loan and subaru

[bigbenny]

hey all im 19 i currently have a 97 nissan pulser and im looking to get a new car.i earn 30k a year and i still live with my parents and im wondering is it worth getting a car loan to get a 04 subaru or weather or not to save my hard earn cash and what a year??

only trouble is i drive and hour and a half a day to and from work and i need something that will last and not break down and whatever.. so is it with getting a car loan? for a 20k car??

thanks fella's

 

[Daver]

hey all im 19 i currently have a 97 nissan pulser and im looking to get a new car.i earn 30k a year and i still live with my parents and im wondering is it worth getting a car loan to get a 04 subaru or weather or not to save my hard earn cash and what a year??

only trouble is i drive and hour and a half a day to and from work and i need something that will last and not break down and whatever.. so is it with getting a car loan? for a 20k car??

thanks fella's

Don't get a car loan- it's a silly idea. Interest is still pretty high (9.8% last time I checked, using the car itself as security...) and the car is a depreciating asset, especially with the way the market is going at the moment. Hold out for another year or so, the market will drop even more, and you should be able to pick up the same car for $5k less as well, without going in debt.

 

[Breaka]

It's hard to make any sort of judgment without knowing what type of lifestyle you leed, how well you can save, current expenses, weekly income ($570 before tax?), spending/saving habits yada yada yada...

From my point of view $20k is alot to borrow on a $30k p.a. income, especially when that $20k turns into alot more you'll have to pay - depending on term of the loan and interest rate. I understand the importance of having a reliable car especially when the distance you travel per day is taken in consideration, but you're 19 - you're meant to have a shit car!

Why not knock that $20k back to $10k? You'll still be able to buy a car more than capable of driving those K's and you're weekly installments will be considerably less (not to mention the interest you'll be paying over the entirety of the term). Have a look at some loan calculators, these will give a bit of idea of the type of money you'll be forking out weekly, interest paying etc. etc.

 

[bigbenny]

thats a good point but its not going to cost 20k cause ive got 4 k already so technically it will be around the 16k mark... and im hit up with rego service and new brakes with in two weeks.. so i could be using that money on a car that is much more reliable which is why im still stuck

any more suggestions? is there people out there with car loans?? lol

 

[Jon]

Are you talking 45mins each way or 90 each way?
Cause to drive 90 minutes to work each day will pretty much destroy the car before you pay it off.
So buy an understressed shitter for cheap unitl your income goes up.
Unless you live inner city and have to deal with endless traffic, in which case, ride.

 

[slip]

That would be the one of the worst things you could do in this situation.

Buy a cheaper car, balance price/features/condition and expected reliability effectively. Getting a loan for a 5 year old Subaru at $20k is completely mental from a wealth creation and positive financial growth point of view.

Even if you can afford any car you want, newer is not always better/more desireable. Rethink your choice in car and see what you come up with, or what criteria you have. All cars need servicing, it's cheaper than fixing shit too.

 

[Dane]

What Suby do you want? Could you settle for a 2000 or even 99? Possibly save yourself 6 or 7 grand. I'm not great with numbers, but I'd guess that by the time you've paid 24 grand or whatever your loan ends up costing, your 20 grand car may only be worth 15.

As far as having to spend money on your pulsar. Best advice I got from dad when I was whinging about having to spend money on my car was to just deal with it. Car's are almost always money pits. Neglecting maintenance will make it unsafe and probably cost you more in the long run. No matter what car you get you'll have to spend money on maintenance. Stuff wears out. It's life. You may by an 04 suby and find you have to replace the clutch in 6 months because the last owner rode the clutch just a bit too much.

I sold my last car 6 months ago and I estimate that I'm saving approx $9000 a year in associated costs (inc petrol). Sure I've had to adjust my lifestyle a bit, but I'm loving not having a car (no excuse to ever be sober).

 

[Dane]

Cause to drive 90 minutes to work each day will pretty much destroy the car before you pay it off.

Would you care to explain. How is driving 90 mins going to do much more damage to a car than driving it 10 mins?

 

[Matt H]

Would you care to explain. How is driving 90 mins going to do much more damage to a car than driving it 10 mins?

It'll do the same amount of damage as driving a car for 10 minutes 9 times a day.

 

[Dane]

It'll do the same amount of damage as driving a car for 10 minutes 9 times a day.

I believe it would do less, as my understanding is that the majority of damage is done when the engine is cold - therefore not as well lubricated.

 

[Matt H]

It was a bad way of putting it... the point is more km's/running time is the more "used" a car is going to get...

 

[wombat]

It'll do the same amount of damage as driving a car for 10 minutes 9 times a day.

Doubt it, one longer trip is going to be a shitload better than a bunch of short ones which barely give the motor time to warm up properly.

 

[Largest]

Yeh, less damageduring a long trip for sure.

apparently it works something like this:
Damage @> operating temp = x
Damage @< operating temp = 6x

In response to the OP, I would set aside the same amount as what the loan would cost for 6 months and use it for repairs, and saving for a new car. It will most likely be cheaper to insure, run, service and repair.

 

[Dane]

Thanks Largest!

Matt H, I see what you were getting at, but it's hardly relevant. I disagree with Jon that driving a car 90min daily "will pretty much destroy the car before you pay it off."

How long will it take to pay off a car? For the last four years, I was spending about 6 months of the year driving my car about 1,100 kms a week (approx 900km on the weekend and 200 through the week). Some times towing a 1,700kg trailer (on the weekends). My car was (mechanically) in excellent condition when I got rid of it.

Oh and apologies to bigbenny for causing this thread to get so sidetracked.

 

[bigbenny]

haha thats alight im always keen to learn something new

 

[sawtell]

Cause to drive 90 minutes to work each day will pretty much destroy the car before you pay it off.

maybe destroy the cars value, but not nesciraly destroy the cars performance... as has already been stated.

to many people buy cars purly of the KM's done.

i know when i got my current car, it had done 260k.. all my mates were liek dont get it its done to many kms, thing is the person who owned it last lived in horsham, and drove to melbourne 3 times a week.. so that is roughly 2000kms a week, on freeway.

ive done 40000kms in it my self over a year and a half, and not one major problem.

i have mates who have bought cars that have done 150k and needed new engines, g/box's, suspension etc, as they bought it purly by what the odometer said, not by how it actualy drove..


that is SOOOOOO of topic, sorry..


but any way..

i was in your situation, pretty much this time last year..
I do 70kms each way to uni, i work PT and earn 25kish, was 19, had 10k saved up, and was going to spend 20k on a 03 wrx wagon.
i was so keen to do so, i had even been to banks getting all my options on a loan, taken my money out of my long term savings account, and ready to spend.

Then i was talked out of it, a car that new, in 5 years time, (when i was going to pay the loan off), would probaly be worth 15k market, plus i would have done ALOT of kms in it (1000k ish a week), so would probaly strugle to get 12k for it... plus the extra 3-4k in intrest i would have spent on the loan (or what ever it was).. i would have came down almost 10grand, in 5 years.... which is a fair bit of money when you think about it. on a small wage. when you already have a perfectly working car.

i now have double what i had at the time saved up, i earn enough interest to make owning my car pretty much free, it pays my rego, insurance and maintence cost's. When i finish uni, and start a full time job (or what ever i do), i know i will have enough money saved up to put a deposit on a house if that what i decide to do... and then i can look at getting a nice car, once the more important things in life are sorted out.


i will admit, having mates who work full time, qualified tradeys, on their 60k+ a year, driving around in their nice cars, makes me want to go out and buy one. but i know, in the long run it is better not to.

 

[RangaRMX]

What kind of Subaru are you looking at?

If it's any kind which is turbocharged then absolutely forget about it.
Don't even go near an older turbo unless you've got some spare money to burn, unfortunately, and I know this isn't always true, but a lot of WRX's, GT and XT Foresters, have been flogged to hell and back and they don't have the strongest gearboxes to start with, so that would probably be likely to be on it's way out. Again, I'm not saying this would be definite, but my uncle has owned a few and a few of my mates have too. Trust me, the older (pre 05 I think) gearboxes don't hold up all that well.

I think as a 19 year old that wants a car, their priority should be reliability and cost of running. For this I would thoroughly recommend a diesel, possibly a VW Golf if you can afford one, or an older model Peugeot like a 406 or something. I used to have a Peugeot 405 turbo diesel, and it was a pleasure to drive, nice and economical, and hardly the sort of thing to get you into much trouble with the police
Obviously I just said to avoid turbos before, but the odds of someone owning one of these cars and flogging them is much less likely than someone flogging a WRX that they owned. Then there's the fact that you should be able to pick up one for 10k or under, and it will last a fair while. You should still be driving it when you pay off your loan, if you get one. Then you might even be a diesel convert like myself, I just love the way they drive for a day to day around town car.

 

[24alpha]

This thread is laughable!

You don't buy a car to make money on it. Cars loose value the moment you drive them off the lot. That is not the reason the OP wants to buy a car. He wants a reliable car so he can keep his job.
Firstly, getting a loan for a car is not a bad thing. It helps to establish a credit rating, helping you to get a homeloan in the future. How much you want to spend on a car is up to you, whether you get a loan or not is up to you.
Why bother coming on a Mountain Bike forum asking for advice.

 

[Jon]

All the opinions expressed above are valid. My point was merely to indicate that the amount of usage should be balanced against depreciation. Better off to buy something that has already depreciated much of its value so that putting lots of k's onto it wont result in a huge loss of value.

 

[sawtell]

This thread is laughable!

You don't buy a car to make money on it. Cars loose value the moment you drive them off the lot. That is not the reason the OP wants to buy a car. He wants a reliable car so he can keep his job.
Firstly, getting a loan for a car is not a bad thing. It helps to establish a credit rating, helping you to get a homeloan in the future. How much you want to spend on a car is up to you, whether you get a loan or not is up to you.
Why bother coming on a Mountain Bike forum asking for advice.

to be honest, i strugled to read what he wrote, he has used wrong words, bad grammar, and well it makes about 5% sense..

but i thought it was along the lines of:
"should i take out a loan now for a 2004 subaru, at the age of 19, i earn 30k, or should i save my money for another year, and then buy one with out a loan" ..

nothing in there about loosing a job... if he needs a reliable car for work, he needs one for work, and thats a whole different can of worms.